Mike Paterson’s daily Forex brief
Large quantities of Euro buying by a US bank, allegedly on behalf of the IMF for payments to Portugal and Greece, coupled with Spanish bonds falling back below 6% has provided much needed respite, for the moment at least.
EURUSD has rallied to 1.3142, EURJPY back up to 105.94 and EURGBP has moved up from yesterday’s 19-month lows around 0.8210, though the 0.8230 pivot to reach 0.8266 (GBPEUR down to 1.2095). I do continually say nothing moves in a straight line for long and so it’s proved once again.
This move has had traders scrambling out of some other long-USD positions and we’ve seen GBPUSD hold the very strong 1.5800-10 line that I mentioned yesterday, only to bang its head again on the apparent 1.5930 ceiling. CPI and RPI data out at 09.30 may have something to say on this though.
The Aussie had a little run-around after the dovish RBA Minutes raised expectations of an interest cut next time but has had little real change overall.
There has been talk that the BIS has been seen selling EURUSD this morning around the 1.3145 level but we haven’t fallen back too far just yet.
Stop Press: UK CPI has just come in at +0.3% m-o-m and + 3.5% y-o-y with RPI at +0.4% and +3.6%, both in line with expectations and we’ve seen little change in the Pound thus far.
Plenty more data to come today from EZ and US (see below). So hopefully we’ll see whether this Euro respite turns into anything more extensive before the day is out.
09.30 –UK- CPI / RPI
10.00- EU- Eurozone CPI / ZEW Economic Sentiment
13.30- US- Building Permits / Housing Starts
14.15- US- Capacity Utilization / Industrial Production
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